 Do you want to earn monthly dividends from the crypto that you're already hodling? If you're going to hodl, why not get paid passively to do so? In this series today, we're going to cover different ways to hold your crypto while also receiving a reward from it. Like if you needed an extra incentive to hold crypto, am I right? You won't want to miss this one. Let's dive in. Hey, what's up Jay here and welcome to Bitcoin Daily bringing you guys the best tips, tutorials and ideas to help you become profitable and successful traders. If you're new here, the goal of this channel is to empower you with the resources and knowledge to get to that next level. So make sure to subscribe, like and turn on that notification bell as we continue to spread the knowledge of mass crypto adoption. So today's spotlight is on BlockFi. BlockFi is a non-bank lending firm based in the United States. It was founded by Zach Prince and Florie Marquez in August of 2017 with the aim of providing bank-like services to cryptocurrency holders. BlockFi's very first funding came in the form of a $1.6 million seed capital round in February 2018. Since then, the company has received more than $150 million in further funding. Some of the notable BlockFi investors include Galaxy Digital, the Winklevoss Twins and Anthony Pompellino's Morgan Creek's Capital. So BlockFi currently provides three main services. The first one is of course interest-bearing crypto horror accounts, cryptocurrency trading and crypto-backed USD loans. So BlockFi interest accounts known simply as BIAs enable users to earn interest on their cryptocurrency holdings by depositing them into a BlockFi account. The savings account accepts a narrow selection of major cryptocurrencies and stablecoins as deposits and pay competitive interest rates on a monthly basis similar to a savings account in traditional banking. Interest rates are paid out in the same currency that has been deposited by default. However, BlockFi also provides users with an option to receive their interest payments in any other of their supported currencies. You can get up to a $250 crypto bonus with a deposit of $25 or more in crypto. So you can actually check out right here on the BlockFi website if you go to BlockFi.com slash crypto interest account to see exactly what the possibilities to earn are in the different currencies that they have, right? So you have Bitcoin, Ether, Litecoin, GUSD, USDT, Pax, USDC and PaxG. So from GUSD down, these are all stablecoins. So one, two, three, four, five, five stablecoins in three cryptocurrencies. So just as an example, in BTC, let's say we put, let's do one Bitcoin over 10 years. So one Bitcoin over 10 years, it says that your total crypto earnings would be around 0.79 Bitcoin. Total USD interest over 10 years is $30,000, right? USD interest per year would be around $3,000. So that's just, remember, this is just on top of whatever the value of crypto does, right? So whether crypto goes up or down, all that fluctuation you're still exposed to, you're just going to get this added on top of it. And the good thing about this is that it's in, you get paid in Bitcoin, right? Let's say you get one, you have one Bitcoin, let's say you earn a whole other Bitcoin. Not only do you earn whatever the USD value of it is, but you also earn the value of Bitcoin while it's rising, right? So you could go here and play around with it, you know, put one Bitcoin and just kind of put it all the way for 30 years. You can see here that you could earn around $4.74 Bitcoin, $6,000 per year, you know, $180,000 at the end of the 30 years. And I'm not sure exactly what they're, what APY they're using here, but I know that the APY for Bitcoin, 6% until 2.5 Bitcoin. So I think 2.5 is a max you can do before they drop it down to about around 3%. So if you had 2.5 for 30 years, you could be getting around $15,000 per year on average. I think is what that's saying. It will be around, you know, around half a million dollars in 30 years, right? Now this is just, I don't know how exactly this calculator is averaging it out, but let's do our own calculations, right? Let's go to the a compound interest calculator. And let's say we put one Bitcoin, right? Let's just start with one Bitcoin, it's around 32,000 right now. So let's do one Bitcoin at 32,000. And let's say that on top of what we're going to be earning in the interest, we're also going to be contributing monthly, right? So I'm going to put that we're contributing, let's just for simplicity's sake, let's say $100 a week, which would total to $400 monthly time span. Let's put 10 years, if it lets me, okay, I guess you got to change it like this. Let's just put 10 years and we're going to put the 6% rate compounded monthly, right? So that ends up being in 10 years, your 32,000 should go up to around $124,000, right? And that's just the one Bitcoin you have, right? So that's not calculating, that's not taking into account whatever the Bitcoin, you know, the value of Bitcoin rises in that time. So it'll be 124,000 based on these numbers and this all changes, it's obviously going to be higher guys, you know, if you expect Bitcoin to do another 200 average, another let's say 100% per year for the next 10 years, that's going to be a lot, a lot more I'm talking about could be millions, right? So this is just a way to take advantage of compounding interest to, you know, skyrocket your holdings, right? If you're already going to be holding Bitcoin, why not earn an extra 6% interest on it and you'll get more in return long run on top of whatever the gains are just of holding Bitcoin. So it makes sense, right? So you must be asking yourself, how does BlockFi fund the generous interest rates it pays on crypto deposits? These deposits are lent to trusted institutional and corporate borrowers who pay an interest rate to BlockFi. The interest for the rate is significantly higher than the interest for the deposits and this way BlockFi is able to make it worthwhile for users to deposit their funds with them. It's important to note that although users deposits are prioritized over the company's equity to reduce their risk, they are not FDIC or SIPC insured, okay? That's the big difference between a bank and not a bank, right? However, this is the other big difference between having your money in a bank versus something that's not a bank, right? If you go ahead and Google best high yield savings accounts in January 2021 or it doesn't matter what year it is really. If you look at this guys, this is crazy, right? The number one highest yielding bank savings account right now is this. Look at what it's giving you, 0.65% per year, right? So if you put $1,000 in there, you're going to get 0.65% return on your $1,000, which is what, $6? So let's do the math on this guys because this is pretty crazy, right? Let's say you have $10,000 in your savings account. If you have the top bank here, which is this bank, I've never really heard of that bank, that would be paying you plus 0.65% equals $65 per year and obviously it compounds, right? So now the next year, you do it again plus 0.65% Wow, there you go in two years you guys made $130 guys. Now let's do a third year plus 0.65%. You get the picture and of course that's without taking into account that the inflation rate, which on average per year, it's around 2%. So in reality, your $10,000 plus 0.65% minus 2%. So you're actually losing money guys. Look at at the end of the year, look at where your cash is actually happening. This is this is what you're actually getting. This is the actual value for your dollar. Even though it might say at the end of the year $10,000 plus whatever the 0.65% is the $65 extra, you're actually losing almost $150. So now what does BlockFi offer here? So this is this here is my account. So I've been testing this. As you can see, I don't have too much money in it yet. I've just kind of been playing around with it. I created this account, I believe at the end of last month. So maybe I crude interest for like two days or something like that. And then so I so I've been paid, you know, 0.91 cents, right? But so far this month, I've been paid about $4.50. So that'll be a probably around $5 by the end of the month. And this is just with $1,000 right with $1,400 in there. Just so that you guys can see what the different coins pay you annually, you can see here, Bitcoin, you get paid 6% per year. Ethereum is paying out 5.25% GUSD, which is the Gemini stablecoin is paying 8.6% per year. A Litecoin is paying 5% per year. PAX is another stablecoin paying 8.6 per year. PAXG is paying 5% per year and USDC is paying 8.6% per year. So those are the returns on the coins if you enter into any of these interest accounts, right? So BlockFi also provides a no fee trading service, which allows users to quickly swap between the platform supported currencies. While there is no direct fee charged by BlockFi, users do need to be wary of the spread on trades that they are making. This is easy to check via the confirmation screen when you are about to finalize a trade. So we already spoke about the coins that BlockFi supports. Further coins and tokens are expected to be added over time. However, BlockFi has a rigorous vetting process for adding any new currency. So now let's talk about crypto backed loans. Crypto backed loans is BlockFi's longest standing product, right? BlockFi claims that these can be applied for in less than two minutes and funded in as little as 90 minutes following approval. It can, however, take up to one business day for them to actually approve a loan application. These loans are paid out in fiat currency or stablecoins and collateralized with cryptocurrency deposits. This provides a great way for cryptocurrency holders to get their hands on fiat currency for immediate needs without selling their holdings and creating a taxable event. Now, why is avoiding a taxable event important in any type of investment? If you look here, you can see here the 2020 capital gains tax rates, right? So for long term capital gains taxes, if you made zero to $40,000, you would be taxed zero percent. If you did over $40,000 up to $441,000, you'd be taxed at 15 percent, right? So what's a long term? Long term is if you're holding something for over one year, right? So if you hold Bitcoin, for example, for over one year, then you're going to be taxed either 15 percent or 20 percent, depending on how much income you made over that time, right? Now, if you don't sell at all, then it's not a taxable event. So there's no taxes because it's all unrealized profits. It's when you realize those profits that it becomes a taxable event. So what the rich do in order to avoid taxes and avoid taxable events instead of selling their assets or selling their investments, what they do is they use those investments as collateral. So you get your investment, you use that as collateral and you get a loan while using that as collateral. So now you pay whatever the fees for the loan is. In this case, it's between 5 to 10 percent, 5 to 9 percent. I think which ends up being better in the long run because you're not getting taxed a 15 to 20 percent, right? So holding makes sense for taxes. Now, if you're in and out of trades very quickly in less than a year, right? Then you're paying the regular taxes on those gains. For example, if you do, let's say right here, if you do two hundred thousand dollars in income, right? Including the sale of your Bitcoin, whatever the gains on your Bitcoin was, you're going to be charged thirty two percent on that. So that's a taxable event. You're getting charged thirty two percent versus if you hold it for over a year and then sell the same two hundred thousand, you're getting paid, you're getting taxed 15 percent. So that's half the cost in taxes. One day we could do a deep dive into taxes, but today I just wanted to touch on that subject really quick. So borrowers must over collateralize their loan, meaning that the amount of cryptocurrency that they lock up will be greater than the value of the loan itself. This ensures that the loan can be repaid in full, providing a buffer from price of volatility and any risk of default. The principal amount on loans through BlockFi are paid back some at the end of the loan term, which means only interest payments need to be paid on a monthly basis. Users may borrow fiat currency worth up to 50 percent of the value of their cryptocurrency, holding at BlockFi depending on the cryptocurrency used as collateral. BlockFi loans are paid directly into the borrower's bank account while loan repayments and interest can be made in dollars or crypto. Repayments with crypto can be made in the stablecoins Pax, USDC or GUSD. Alternatively, a borrower can choose to pay in crypto by liquidating their collateral at its current market value. Liquidating collateral will also incur a trading fee of around 1 percent. Loan repayments made in fiat currency can be made via wire transfer or ACH. Wire transfers will result in a faster return of collateral 1 to 2 business days versus ACH transfers, which takes 5 to 10 business days. Loan rates for BlockFi's crypto backed fiat loans vary with the loan to value ratio. In short, LTV ratio describes the size of the collateral you lock up versus the size of the loan you take. It is a way to help the financing company estimate the risk of lending you money and from that derive the size of your interest payments. The more collateral you lock up in proportion to your loan, the lower your interest payments will be. Using 50% loan to value ratio, you'll pay a 9.75% APR, 35% you'll pay a 7.9% APR and 20% you'll pay a 4.5 APR. All of these rates are paid in addition to a 2% loan origination fee, which is a one off payment for each loan made. The minimum amount which can be borrowed is $5,000. BlockFi also offers a mobile app, which is available on both iOS and Android. The app provides all their core services with a nice and sleek user experience, which is easy to follow. Users can do everything on the app from monitor and manage their account balances to sign up for loans. So deposits into BlockFi are free. However, only one free withdrawal transaction is provided per month, one each for cryptocurrencies and stablecoins. If you wish to make additional withdrawals, these will incur a fee. There are maximum weekly withdrawal limits of 100 BTC, 5,000 ETH, 10,000 LTC, 1 million USD, stablecoins or 500 PaxG. The minimum withdrawal amount must also be greater than 0.003 BTC or 0.056 ETH. There is no minimum limit for deposits. As far as supported countries goes, BlockFi allows most countries around the world to open a BlockFi interest account with the exception of countries which are sanctioned or watchlisted by the United States. Also, users in the state of New York are also prohibited from opening accounts. Unfortunately, and the latest thing that BlockFi is currently doing is that they're releasing the world's first ever Bitcoin Rewards credit card. So they posted here that they will be releasing the card in the first quarter of 2021, which is this year. So the waiting list is available for clients with funded BlockFi accounts in the BlockFi app. So they're also offering a sign up bonus in Bitcoin of $250 after spending $3,000 or more on the card within the first three months, giving everyone a chance to earn extra Bitcoin in a familiar way. The card will have a $200 annual fee though. So make sure that you know that. All right, guys, so I hope you guys have enjoyed this review of BlockFi. If you guys are interested in signing up for BlockFi, I will post a link below in the description and as well in the comment section so that you guys can go ahead and if you'd like to support this channel, you can use my referral link and we'll both get a kickback when you make a deposit. I will also be reviewing other sites that do similar things. So stay tuned for that. And I will also be making an update on my BlockFi account as well as other accounts to see how they're doing over the long term. Appreciate you guys if you stay tuned throughout the whole thing. Hopefully this is another way to make you guys some profits in the long run as that's what we're always looking to do here. Provide you guys with the knowledge and resources to make you more money. If you enjoyed this video, if you found value in this video, please go ahead and hit that subscribe button, hit the like button and drop a comment. Let us know what you think if you've been using BlockFi already. And we know what it's been like for you. What's your experience like? Thank you, guys. I hope you guys enjoy the rest of your week. I will see you tomorrow for tomorrow's video. As always, peace and love.